Park Hotels & Resorts Inc. SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

SWOT analysis is a vital strategic planning tool that can be used by Park Hotels & Resorts Inc. managers to do a situational analysis of the organization . It is a handy technique to evalauate the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Park Hotels & Resorts Inc. is facing in its current business environment.

The Park Hotels & Resorts Inc. is one of the leading organizatations in its industry. Park Hotels & Resorts Inc. maintains its prominent position in market by critically analyzing and reviewing the SWOT analysis. SWOT analysis an immensenly interactive process and requires effective coordination among various departments within the company such as – marketing, finance, operations, management information systems and strategic planning.

The SWOT Analysis framework enables an organization to identify the internal strategic factors such as -strengths and weaknesses, & external strategic factors such as - opportunities and threats. It leads to a 2X2 matrix – also known as SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix enables the managers of the Park Hotels & Resorts Inc. to develop four types of strategies:

SO (strengths-opportunities) Strategies

WO (weaknesses-opportunities) Strategies

ST (strengths-threats) Strategies

WT (weaknesses-threats) Strategies

SWOT Matrix Strategies Objective

The core purpose of SWOT matrix is to identify the strategies that an organization can use to exploit external opportunities, counter threats, and build on & protect Park Hotels & Resorts Inc. strengths, and eradicate its weaknesses.

Step by Step Guide to Park Hotels & Resorts Inc. SWOT Analysis

Strengths of Park Hotels & Resorts Inc. – Internal Strategic Factors

As one of the leading organizations in its industry, Park Hotels & Resorts Inc. has numerous strengths that enable it to thrive in the market place. These strengths not only help it to protect the market share in existing markets but also help in penetrating new markets. Based on Fern Fort University extensive research – some of the strengths of Park Hotels & Resorts Inc. are –

Good Returns on Capital Expenditure – Park Hotels & Resorts Inc. is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.

High level of customer satisfaction – the company with its dedicated customer relationship management department has able to achieve a high level of customer satisfaction among present customers and good brand equity among the potential customers.

Strong dealer community – It has built a culture among distributor & dealers where the dealers not only promote company’s products but also invest in training the sales team to explain to the customer how he/she can extract the maximum benefits out of the products.

Strong distribution network – Over the years Park Hotels & Resorts Inc. has built a reliable distribution network that can reach majority of its potential market.

Superb Performance in New Markets – Park Hotels & Resorts Inc. has built expertise at entering new markets and making success of them. The expansion has helped the organization to build new revenue stream and diversify the economic cycle risk in the markets it operates in.

Automation of activities brought consistency of quality to Park Hotels & Resorts Inc. products and has enabled the company to scale up and scale down based on the demand conditions in the market.

Highly successful at Go To Market strategies for its products.

Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.

Weakness of Park Hotels & Resorts Inc. – Internal Strategic Factors

Weakness are the areas where Park Hotels & Resorts Inc. can improve upon. Strategy is about making choices and weakness are the areas where a firm can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Park Hotels & Resorts Inc. needs to put more money in technology to integrate the processes across the board. Right now the investment in technologies is not at par with the vision of the company.

There are gaps in the product range sold by the company. This lack of choice can give a new competitor a foothold in the market.

High attrition rate in work force – compare to other organizations in the industry Park Hotels & Resorts Inc. has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.

Limited success outside core business – Even though Park Hotels & Resorts Inc. is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.

The marketing of the products left a lot to be desired. Even though the product is a success in terms of sale but its positioning and unique selling proposition is not clearly defined which can lead to the attacks in this segment from the competitors.

The company has not being able to tackle the challenges present by the new entrants in the segment and has lost small market share in the niche categories. Park Hotels & Resorts Inc. has to build internal feedback mechanism directly from sales team on ground to counter these challenges.

Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Park Hotels & Resorts Inc. to capture new customers and increase its market share.

New trends in the consumer behavior can open up new market for the Park Hotels & Resorts Inc. . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.

Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Park Hotels & Resorts Inc. an opportunity to enter a new emerging market.

New environmental policies – The new opportunities will create a level playing field for all the players in the industry. It represent a great opportunity for Park Hotels & Resorts Inc. to drive home its advantage in new technology and gain market share in the new product category.

Stable free cash flow provides opportunities to invest in adjacent product segments. With more cash in bank the company can invest in new technologies as well as in new products segments. This should open a window of opportunity for Park Hotels & Resorts Inc. in other product categories.

Government green drive also opens an opportunity for procurement of Park Hotels & Resorts Inc. products by the state as well as federal government contractors.

New customers from online channel – Over the past few years the company has invested vast sum of money into the online platform. This investment has opened new sales channel for Park Hotels & Resorts Inc.. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.

The new technology provides an opportunity to Park Hotels & Resorts Inc. to practices differentiated pricing strategy in the new market. It will enable the firm to maintain its loyal customers with great service and lure new customers through other value oriented propositions.

New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.

Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Park Hotels & Resorts Inc. in those markets.

As the company is operating in numerous countries it is exposed to currency fluctuations especially given the volatile political climate in number of markets across the world.

New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .

Intense competition – Stable profitability has increased the number of players in the industry over last two years which has put downward pressure on not only profitability but also on overall sales.

Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Park Hotels & Resorts Inc.

Limitations of SWOT Analysis for Park Hotels & Resorts Inc.

Although the SWOT analysis is widely used as a strategic planning tool, the analysis does have its share of limitations.

Certain capabilities or factors of an organization can be both a strength and weakness at the same time. This is one of the
major limitations of SWOT analysis
. For example changing environmental regulations can be both a threat to company it can also be an opportunity in a sense that it will enable the company to be on a level playing field or at advantage to competitors if it able to develop the products faster than the competitors.

SWOT does not show how to achieve a competitive advantage, so it must not be an end in itself.

The matrix is only a starting point for a discussion on how proposed strategies could be implemented. It provided an evaluation window but not an implementation plan based on strategic competitiveness of Park Hotels & Resorts Inc.

SWOT is a static assessment - analysis of status quo with few prospective changes. As circumstances, capabilities, threats, and strategies change, the dynamics of a competitive environment may not be revealed in a single matrix.

SWOT analysis may lead the firm to overemphasize a single internal or external factor in formulating strategies. There are interrelationships among the key internal and external factors that SWOT does not reveal that may be important in devising strategies.

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Weighted SWOT Analysis of Park Hotels & Resorts Inc.

In light of the above mentioned limitations of the SWOT analysis / matrix, corporate managers decided to provide weightage to each internal strength and weakness of the firm. Organizations also assess the likelihood of events taking place in the coming future and how strong their impact could be on company's performance.

This method is called Weighted SWOT analysis. It is better than doing simplistic SWOT analysis because with Weighted SWOT Analysis Park Hotels & Resorts Inc. managers can focus on the most critical factors and discount the non-important one. It also solves the long list problem where organizations ends up making a long list but none of the factors deemed too critical.

Limitation of Weighted SWOT analysis of Park Hotels & Resorts Inc.

This approach also suffers from one major drawback - it focus on individual importance of factor rather than how they are collectively important and impact the business holistically.